An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility

Wednesday, April 6, 2011

Can India hit corruption for six?

India, a country of cricket fanatics, has been in serious celebration mode since the national team's thrilling victory in the cricket world cup last weekend. News and media outlets here have covered little else for days. It's been front page news in the national press and all the rolling news programmes have been swamped with wall-to-wall coverage. Now though, as the euphoria starts to die down after Sunday's big victory, attention is beginning to turn to another major issue facing the country - corruption. The big question is though, will India be as victorious in fighting corruption as it has been at fighting its cricketing rivals. And the answer, we fear, is almost certainly no.

Corruption has been a serious problem in India for longer than anyone cares to remember. At 87th, it currently ranks about half way up the Corruption Perception Index from Transparency International. A score of 3.3 (out of a possible 10) suggests a major corruption problem. But recent events, such as the 2G bandwidth auction scandal, and investigations of widespread corruption at last year's Commonwealth Games in Delhi, have suggested a growing willingness by the media to investigate and report on corruption issues, and there is discontent with the practice amongst ordinary Indian people.

Much of the attention has understandably focused on public sector corruption, but few cases exclude companies as alleged bribe payers too. Late in 2010 Telecommunications Minister Andimuthu Raja was forced to resign over allegations that he lost the Indian Government some $38 billion in revenues by offering 2G telecom spectrum licences to favoured companies on beneficial terms. This week, struggling for media attention amongst the cricket hullabaloo, Raja, eight other individuals, and three companies were formally charged with criminal conspiracy, forgery, cheating and corruption in relation to the case. Meanwhile a parliamentary committee investigating the scandal this week quizzed Ratan Tata the head of the Tata Group about his role in the scandal, although unlike some of its rivals, there is no suggestion that Tata is likely to be subject to any charges.

The 2G scandal is gradually gathering momentum, and is putting significant pressure on the Indian government to do something serious about the escalating corruption problems. As yet, though, little tangible action is on the cards. One significant piece of legislation, the Jan Lokpal Bill, proposes to introduce an independent corruption ombudsman body at both national and state levels, but has been held up in protracted redrafting. The country was first promised such a law some 40 years ago. Now, with a view to preventing the government from procrastinating further and watering down the bill, social activist Anna Hazare from India Against Corruption, has pledged to go on an indefinite hunger strike to force the authorities to act. His demand is that they allow civil participation in the bill's review rather than let the government simply force through a toothless version that will do little to address the country's endemic corruption problems. Hazare's promise to fast until death is garnering huge attention and hundreds of people are now planning to join the fast.

Whether the Indian government will see this perfect storm around corruption reform as an opportunity to address a problem that drags down growth and hampers social equity remains to be seen. We certainly hope so. As Rahm Emanuel said at the time of the financial crisis in 2009, "you never want a serious crisis to go to waste."So far though, Prime Minister Singh's Government looks set to do exactly that - waste a perfectly good crisis. India, the country of world champions, deserves better.

4 comments:

Well if it's worth it, all the News Channels are now flooded with Anna Hazare and his fight against Corruption(at least till the next Cricket Series Starts). I lot of people are supporting him and I hope he succeeds.

where fighters against corruption like Anna Hazare (or we sometimes call Ganna Hazare, ganna in hindi means sugarcane)are corrupt by themselves... rays of hope is very thin.. Changing a long practiced system suddenly is not a MATTER OF JOKE. It'll take time.

Translate

Follow by email

Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors from theSchulich School of Businessin Toronto, Canada, best known for our books and research articles on business ethics and corporate citizenship. We've been writing the Crane and Matten blog since 2008, offering unique insight on a range of issues from across the globe.

Andrew Craneis currently the George R. Gardiner Professor of Business Ethics.

Dirk Mattenis currently the Hewlett Packard Chair in Corporate Social Responsibility.